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Tax Break for Erotica? A Museum Favors It

A few years ago, when Ann Marie Coughlin, a New York dominatrix also known as Domina M., donated her brushed-steel bondage machine to be shown at the Museum of Sex, many people benefited.

Visitors to that Manhattan museum got a chance to learn more about sexual domination and sadomasochism. The curators received another attraction for their 15,000-item collection of vintage condoms, pornographic paraphernalia and one sexually explicit Picasso.

And Ms. Coughlin got a tax deduction.

Of course, there are people who quibble about whether whips and etchings and other types of erotica are the kinds of cultural artifacts that deserve a tax deduction. But the question is even more pronounced when it comes to the Museum of Sex because, unlike most other museums, it is not a charitable organization but a for-profit company.

There are a number of for-profit museums operating around the country that have built a business plan around educating and entertaining, like Discovery Times Square in Midtown Manhattan and the Pirate Soul Museum in Florida. The Museum of Sex is a bit different, though, because it has a tax-exempt affiliate, known as the Muse Foundation of New York, that takes in tax-deductible donations for the museum’s collection.

So someone looking to hand over, say, an oil-on-woodblock depiction of barnyard sex, is directed by the Web site, www.museumofsex.com, to an e-mail address, collections@museumofsex.com, and to the foundation, which is in the same Fifth Avenue building as the museum.

More than 1,000 items have been donated, according to Mr. Gluck, who is also on the foundation’s three-person board. Some items, like Ms. Coughlin’s bondage machine, are lent to the museum and put on display. Not all of the donors have taken the tax deduction.

The arrangement is far from typical, though, according to several lawyers who specialize in tax matters involving foundations.

“It’s unusual to say, ‘If you want to donate to my for-profit corporation, then donate to this tax-exempt organization,’ ” said James Reilly, a partner with Condon O’Meara McGinty & Donnelly LLP.

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The Museum of Sex, on Fifth Avenue in Manhattan. Something of a curiosity since it opened in 2002, the museum has 15,000 items, including a sexually explicit Picasso.Credit
Robert Caplin for The New York Times

Under the tax code, private companies are allowed to have dealings with nonprofit organizations with which they are affiliated: consider Starbucks and the Starbucks Foundation. The tax-exempt foundation is required to have an independent purpose that benefits the public.

“Where concerns occur, the issue is whether the tax-exempt organization is operating for the substantial private benefit of the for-profit entity,” said Bruce I. Friedland, a spokesman for the Internal Revenue Service. He declined to comment on the specific circumstances involving the museum.

Mr. Gluck said his lawyers approved the set-up and that the two organizations are distinct. “The Muse Foundation is completely its own separate entity,” he said. “We can’t take money from the foundation and we don’t plan to. We aim to build it up into a foundation whose interests are aligned with the museum.”

Since the museum opened in 2002, off East 27th Street in a building owned by Mr. Gluck’s father, it has been something of a curiosity. The New York State Department of Education said it would not charter the museum as a state-sanctioned institution because it sought to operate as a for-profit corporation.

Mr. Gluck said the state’s objection was to the use of “museum” in the name. He ultimately did not pursue a charter and said he had not been approached since by the state.

Mr. Gluck said the collection had grown over the years, largely through purchases. It now includes an anti-onanism device from Paris in the 1890s, a life-size sex doll and a large cache of magazines, videos and stiletto pumps signed by strippers. Its storage rooms are filled with antique brothel guides, sexually explicit French postcards and shelves of eight-millimeter films.

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The museum’s current exhibition on condoms — sponsored by Trojan — received a positive review in February from Edward Rothstein of The New York Times, who described it as fascinating.

“These commonplace objects — widely used and rarely spoken of, often seen but infrequently displayed — are icons of far more than the phallus,” he wrote.

The museum earns 70 percent of its income from admissions ($16.25; one must be 18 or older to get in) and is expected to draw more than 160,000 visitors this year, Mr. Gluck said. The remaining revenue comes from the gift shop, which, despite the intellectual rigor of some of the museum’s pursuits, features Museum of Sex shot glasses and other items of the sort that often surface at bachelor parties.

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Daniel Gluck, the director of the museum,Credit
Robert Caplin for The New York Times

Mr. Gluck said that after years in the red, the museum was “on the verge of profitability.”

He said that the foundation, on the other hand, was established to underwrite research and to make grants, but that it has yet to begin those efforts because it lacks resources.

Created in 2000, the foundation has a mission, as defined on the museum’s Web site, “to preserve and make available a comprehensive collection of materials relating to the history, evolution and cultural significance of human sexuality.”

It has lent items to institutions other than the sex museum, Mr. Gluck said.

June M. Reinisch, the director of the Muse Foundation and a vice president at the sex museum, said the foundation hoped eventually to help finance the creation of erotic art. But currently it has not been very active beyond the collection efforts, added Ms. Reinisch, who is also a former director of the Kinsey Institute for Research in Sex, Gender and Reproduction.

“There’s no way it’s being used in a way that isn’t appropriate,” she said of the foundation.

The foundation’s 2008 tax return, which is the most recent available to the public, reported no income and $3,956 in expenses.

In 2007 the foundation did stage a big party, billed as the “1st Annual Museum of Sex Gala,” that was advertised as a benefit for the foundation. It cost $88,648 to organize, included an appearance by the performer Dita Von Teese and ultimately lost money, Mr. Gluck said.

The foundation does continue, though, to provide a vehicle for people like Ms. Coughlin, who seek to donate items they hope will appear in the museum. Elizabeth Mariko Murray, the museum’s collections manager, identified several objects from the foundation during a recent tour of the museum.

The accompanying signs described them as being from “The Museum of Sex Collection.”

“That’s to be less confusing for the public,” Ms. Murray said. “The Muse Foundation operates very quietly.”

Ms. Coughlin said she had donated pieces to the foundation, and, by extension, the museum, because she simply did not have space in her home anymore. And the museum, she said, “didn’t have a section on BDSM,” which she translated as bondage/discipline, dominance/submission, sadism/masochism.

“It was kind of cool,” she said, “to be able to get a tax deduction.”

A version of this article appears in print on , on Page C1 of the New York edition with the headline: Tax Break For Erotica? A Museum Favors It. Order Reprints|Today's Paper|Subscribe